5 Things You Should Know About Being Self-Employed

by - 8/02/2018 10:26:00 PM

Being self-employed has its advantages and disadvantages. On the one hand, you will have complete control over your work hours, and you have the potential to earn more money than what a normal office worker can earn. On the other hand, it also has its risks, like trying to find your first customers and actually having a steady number of people who are looking to buy your products or avail your services.

As a self-employed individual, you will also need to handle responsibilities like filing your tax returns, which you may not have done in the past. But if you are determined to be self-employed, make sure to read through the list below on the things you must know if you want to go that route.

1. You need to make sure that it is the right decision for you - first, you need to be sure that it is the right path for you. There will be risks involved, and there are many who tried it out, only to go back to being an employee in the end. Why don't you interview someone who has been self-employed for a while and asks for tips on how you can be successful.

2. Study up on the business structures - you need to know what business structure you will use as there will be some paperwork that you will need to file. The simplest structure you can choose is that of a sole trader, but you can also choose to be a limited company. Do your research so you can know the difference and find out which best fits your goals.

3. You need to make sure that you are keeping proper records - if you want to be successful in your stint as a self-employed individual, you must learn to keep up to date and accurate records. Any transaction you make must be recorded. It will be helpful when you are doing your taxes.

4. Getting insurance would be a smart move - when you put up a business, you will need to get insurance as it is required by the law, such as a public liability insurance so that you are protected if ever there are third party injuries in your place of work, whether in your own shop or when you go service a location. There's also the employer's liability insurance, which you should get if you are planning to expand and hire some employees for your business. It may seem like an added expense, but insurance will protect you when there are unfortunate situations.

5. You need to have your UTR in order to pay taxes - make sure to get your utr or unique taxpayer reference. This number is from the HM Revenue and Customs and is actually automatically issued once you register as a self-employed sole trader. This is necessary for when you want to create an online account with HRMC and when you need to register for individual taxes.

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